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The sourcing industry contributes 5.5% to Bulgaria’s GDP and marks a double-digit growth in development

The size of the sourcing sector in Bulgaria amounts to EUR 2,9 billion for 2019. This is identified by the data in the Annual Report of the Association for Innovation, Business Excellence, Services and Technology (AIBEST) for the development of the sourcing industry in the country. Last year, the sector contributed 5,5% to Bulgaria’s GDP compared to 5,2% in 2018. For another year, the sourcing industry marked double-digit growth in its development, as in 2019 operating revenues increased by 19,6%. Our preliminary data for 2020 show that even this year the growth will also remain in double digits. The forecast for 2022 indicates that the industry will continue to develop and be a major pillar in the Bulgarian economy, as its relative share in the country's GDP will reach 8,9%.
The annual analysis is created by SeeNews and includes data about 610 Bulgarian companies dealing with business processes services (BPO) and IT services (ITO) in 2019. The ratio between the two subsegments shows an advantage for ITO – 322, while the number of companies in the field of BPO is 288.
The industry is also strengthening its position as a preferred employer, as evidenced by the growing number of people working in the sector, as well as the rising costs of employees and taxes paid by companies. The sourcing sector accounts for 3,5% of the Bulgarian labor market. Nearly 78,000 people were employed in the industry at the end of 2019 – over 5000 growth in comparison to last year. Even in the challenging 2020 year, the industry continues to hire new people, and by August 2020 the number of employees in the sector reached 81,000 people (3,000 more employees than in the successful 2019).
The sector marks a significant social and economic footprint. It became the backbone for the development of the new middle class in Bulgaria and for the retention of young people in the country. For 2019, only the taxes that the industry has paid into the state treasury are equal to the budget of the municipality of Kazanlak for 2020 or slightly more than the planned expenditures in the budget framework of Sofia Municipality for health care in 2020. At the same time, the industry of all wage expenditures in the economy in 2019 (against 8.5% last year).
"We will continue to be an attraction for talents and a preferred employer because of the development opportunities we provide to young people. In 2020, Bulgarian companies in the sector showed a global level in providing reliable, secure, uninterrupted and quality service. We can only be proud that we managed to transform the processes extremely quickly and switch to work from home mode. Many of our competitors in and outside Europe have not been as flexible and successful. We need to capitalize on this advantage and position ourselves in time as a preferred destination for high value-added services over European companies. The extent to which we will seize this opportunity in 2021 and 2022 will be crucial in terms of how Bulgaria emerges from the crisis, how well it stands in terms of its global competitors and how quickly it catches up with older EU members in terms of at the levels of GDP per capita”, comments Iliya Krastev, Chairman of the Managing board of the Association and CEO of A Data Pro.
Over the past years, the sourcing industry has continued expanding in the region. The largest hubs for business services are still the big cities with universities, but there is a tendency for the activities to be moved outside the capital. Sofia, Plovdiv and Varna are the three biggest sourcing centers, but Veliko Tarnovo and Burgas are also starting to attract more and more new companies.

Te full report can be found here.

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